Every
day many people depend on the safe and reliable
operations of your building's vertical transportation
system. It is of critical importance to the
owners and ultimately to the tenants and visitors
who travel throughout these buildings each day.
Deciding on a competent maintenance company
is a complicated decision. The best service
provider is not automatically the company that
installed your system. Elevator maintenance
can be provided by manufacturers, Independents,
or on a self-maintained basis.

OEM
Manufacturer Elevator Maintenance

Today,
many new elevators run on proprietary computer-based
software that requires specialized tools for
proper maintenance that only the manufacturer
can provide. If your building has proprietary
equipment you will have limited maintenance
service options and generally will have to pay
a premium for elevator maintenance. One advantage
of using OEM manufactures maintenance is the
ability to provide spares parts quickly and
reduce overall downtime for repairs. In addition,
with OEM manufacturer maintenance you deal with
the organization that designed the equipment
and know it operating systems the best. Usually,
manufacturer's maintenance contracts are the
most risk-free choice but you may pay a premium.

Manufacturer Elevator
Maintenance

Other
elevator manufacturing companies actively pursue
maintenance contracts for elevator equipment
they did not manufacturer. The service contracts
they offer are comparable to service contracts
you would consider with the actual OEM manufacturer
of equipment in your building. An advantage
of using another manufacturer may be to save
money or obtain better service in a specific
geographic area. Most manufacturers also offer
a variety of discounts for contracts covering
multiple buildings with the same owner or property
manager.

Independent Elevator
Maintenance

Independent
elevator maintenance companies are located in
most areas of the country. Independents often
charge less for their maintenance programs than
manufacturers. When considering an independent
you will want to investigate the company's level
of technical expertise and ability to provide
spare parts to avoid extended downtimes.

Self
Maintained

Today,
many large facilities such as universities and
medical facilities provide in-house maintenance
for elevator equipment to reduce overall maintenance
costs. Your decision to self maintain elevator
equipment should be based on economics and the
availability of skilled labor. Other factors
to consider include your ability to obtain spare
parts and manage major components repairs. In
addition, you will also need the necessary infrastructure
to process and react to customer questions
or complaints. Due to the increased liability
exposure and technical expertise needed to maintain
the elevator equipment properly, we recommend
using other maintenance options for most customers.
Many elevator companies will not service elevator
equipment that is being maintained by non-certified
elevator mechanics due to increased exposure
to lawsuits.

Knowing
the different types of elevator contract options
can greatly increase your chances of saving
money and finding a maintenance agreement that
meets your building's requirements. The more
risk you are willing to assume, the lower the
cost of services will be. Most elevator companies
offer four types of elevator maintenance contracts.
These contracts offer you a range of coverage
options and discount opportunities.

What
is a Full Maintenance Contract? (FMC)

A
full maintenance contract is written to allow
an elevator service company to take total responsibility
for the elevator equipment identified in the
maintenance agreement. This contract acts like
an insurance policy and allows the manager to
budget total yearly costs and eliminate concerns
relating to elevator liability and exposure
to claims in the event of accidents or injuries.
Liability is limited because the maintenance
contractor assumes all responsibility and determines
the amount of service visits required to keep
the elevator system operating safely. If an
accident should occur, the elevator maintenance
company may be responsible for defending itself
against accident claims and will exhaust every
effort to ensure safe operating condition.

What
is a Parts, Oil, and Grease Contract? (POG)

A
POG contract lists specific items of equipment
that are not covered in the contract, such as
controllers, elevator machines, motor-generator
sets, and cables, etc. A POG contract will only
have value if the contract clearly stipulates
the work to be covered and the parts to be supplied
including frequency of examinations and trouble
calls to be answered. POG agreements also generate
additional paper work and the property manager
must coordinate with the maintenance provider
on what is covered in the contract and what
will be done under repair orders at a later
date. Many maintenance companies are no longer
offering this type of contract due to the increase
costs of solid state components. Usually, maintenance
companies offering this type of agreement will
provide your property with lower monthly charges
than the price of a full maintenance contract
but the coverage will also be proportionately
less.

What
is an Oil and Grease (OG) or Examination &
Lubrication Contract?

OG
contracts include lubrication of moving parts
and minor adjustment on a regularly scheduled
basis. When additional services are needed,
the mechanic reports potential problems to the
property manager who then schedules all repairs
to be paid by the building owner. The cost for
the OG contract is relatively low but when you
include repairs, the entire yearly cost is usually
much higher and more complicated to budget.
OG agreements also generate additional paper
work, as the property manager must coordinate
with the maintenance provider on all repairs.
Liability exposure to claims in the event of
accidents or injuries are even greater than
a POG contract because the owner is responsible
for having parts repaired and replaced. Customer
satisfaction with this type of agreement is
usually very low.

What
is a Survey and Report Contract?

Coverage
under a survey and report contract consists
of quarterly, semi-annual or annual inspection
of all major equipment components. The inspection
does not include maintenance, repair work or
dismantling equipment that necessitate elevator
mechanics. Maintenance or replacement recommendations
may be completed by the owner or by selected
contractors under the property manager's coordination.
This type of contract also makes it
extremely difficult for a building owner to
avoid liability if an accident should occur.

What
you don't know
could cost you a bundle: Understanding maintenance
contract terms and conditions.

Understanding
maintenance contract terms and conditions.

Once
you have decided which maintenance contract
will work best for your property you will need
to find an elevator company. The company
you select will then perform maintenance services
under the type of contract you have specified.
But here's where your troubles can begin. You
must understand what is not covered and how
those services will be billed and what steps
can be taken to control overall maintenance
costs.

Important
questions to ask potential maintenance provider.

Managers
should understand the circumstances under which
they will be invoiced for costs in addition
to the contract price. Before you accept any
maintenance agreement your service company should
answer the following questions:

When
does overtime apply under the contract?

What
are the differences between overtime trouble
calls and overtime repairs as they relate to
the contract?

Is
travel time a consideration because of location
or union agreement?

If
maintenance is missed or incomplete are you
entitled to a refund for that month?

Do
trouble calls count as a regular monthly service
call?

What
is the response time for a trapped passenger?

What
is the availability of spare parts?

Important
facts on maintenance term years and automatic
renewal clauses.

Elevator
companies bill in advance, at the beginning
of each month. Full Maintenance Contracts are
also similar to insurance policies protecting
you from unexpected major repair bills. Owners
will also be required to pay in advance at the
beginning of each month. Some maintenance providers
are even going as far as requiring payment for
90 days in advance via electronic funds transfer.
The standard elevator contract usually
covers a 5-year term with a termination clause
requiring 90-days prior written notice. These
terms can be modified by reducing the length
of the contract and eliminating automatic
renewal clauses. Typically shorter-term contracts
will provide the building owner with the ease
of re-biding or switching maintenance contractors.
The trade-off is that the cost of a shorter-term
contract will most likely be at a higher rate.

Keys
to pricing and annual price adjustment.

Material
costs and labor costs are subdivided in most
contracts. Pricing under full maintenance contracts
is normally divided into a percentage for materials
and labor. Each elevator company has a different
way of calculating the percentage of labor and
percentage of materials. Under full maintenance
agreements you can usually expect costs for
labor to be around 80% and materials around
20 %. Every elevator company also has
a different procedure for annual price adjustment.
Owners need to be aware that a price adjustment
will occur every year. One problem with the
annual price adjustment approach occurs when
cumulative increases are applied over many years.
This yearly price adjustment may increase the
contract price to a level that exceeds the price
the current contractor would charge if the maintenance
contract were put out to re-bid.

Union
elevator mechanics regular working hours are
8:00 a.m. to 4:30 p.m. Monday through Friday.
Wages for work performed outside these hours
during regular working days is normally paid
at time and a half including Saturdays. On Sundays
and holidays union mechanics are paid double
time.

If
you select a maintenance agreement that does
not include callbacks you most likely will be
charge the full overtime portion. Usual maintenance
contracts do not require elevator companies
to perform two-person (crew) or major repairs
on overtime unless specified by the owner to
proceed with the work. For a slightly higher
monthly fee maintenance contracts can be structured
so the owner will be charged only for the overtime-differential
portion on callbacks services and reduce overtime
costs. These overtime charges usually include
more than just the time spent on the job, such
as door-to-door travel time plus mileage for
overtime repairs. You should budget for these
calls and estimate a minimum of 3 hours per
trouble call to be safe.

What
is typically not covered under maintenance agreements.

All
service contracts include a list of exclusions
that will not be covered under the maintenance
contract. Unfortunately, these exclusions can
happen regularly and may increase your overall
maintenance cost by as much as fifteen percent.
Here are some common examples of items that
can result in extra charges:

Overtime
callbacks / trouble calls

Doors
knocked off tracks by movers.

Keys
dropped in the pit (you may be surprised at
how often this happens)

Car
left "keyed off" or left on "independent"
by building personnel, movers or security guards.

Debris
in car or hall door sill tracks.

Foreign
objects caught or wedged under
car or hall doors such as carpet
tacks, small rocks and coins.

Stuck
buttons and broken safety edges.

Flooded
machine room, top of car, or pit

Vandalism:
doors kicked off tracks, fire in elevator cab
set by vandals and burned car buttons.

Calls
placed for service resulting from building power
even though no emergency power feature exists
to run the elevator equipment.

Elevator
telephones and phone monitoring.

Prorating

In
addition to items excluded by the maintenance
company, a contract will also include a list
of prorating. Many maintenance companies never
list any item under prorating if you are willing
to sign a standard five-year agreement. Occasionally,
the company may list elevator components that
the maintenance company believes will soon need
replacement and for which it is unwilling to
bear the full cost. Common items prorated include
cable, bearings and motors. These item are typically
prorated over a five year period (and no longer
than ten years) in which the building owner
agrees to share the cost of components that
are likely to wear out.

Over
20,000 elevator accidents occur every year in
the U.S. One of the most important details in
any elevator maintenance contract is establishing
who assumes liability for accidents. Elevator
service companies are typically responsible
only for components specifically identified
in their service contracts.

Hold
harmless clause

Contractual
hold-harmless clauses allow elevator companies
to avoid legal responsibility by requiring the
owner to defend and hold the elevator company
harmless for accidents or injuries. These clauses
should be eliminated from full maintenance agreements.
Some companies offer discounts to allow the
addition of these clauses, but the discount
is not a bargain if an accident or injury occurs.

Know
your risk

Owners
are accountable for the safe operation of equipment
under their control. If you select any contract
other than full-maintenance you risk putting
the owner in a position where it is complicated
to prove that the elevator system is not under
management control. When signing any agreement
check with your insurance to confirm they cover
this risk. Review all legally binding documents
with your insurance and legal advisor before
you finalize any contract.

10
money saving contract negotiation tips.

Tip
1

Long
term contract discounts

Elevator
companies prefer long term contracts. Usually,
elevator contracts cover a 5-year term with
a termination clause requiring 90-days prior
written notice. If you are willing to sign a
long term agreement ask the elevator company
for a 5% discount for a five year contract.
You may be surprised at how many companies will
accept this deal.

Tip
2

Low
occupancy discounts

Many
elevator companies offer some type of occupancy
discounts. If a large portion of a building
will be vacant for an extended period of time
you will want to ask if this contract discount
is available. Low occupancy discounts usually
range between 5% and 10%.

Tip
3

Multi-building
discounts

If
you have more than one property you may want
to consolidate maintenance agreements to receive
a volume discount price. Multi-building discounts
usually range between 5% and 20%, depending
on the number of elevators.

Tip
4

National-accounts
discount

In
general if you have 10 or more properties in
more than one state you may want to consolidate
maintenance agreement to receive a volume discount
price. National account discounts usually range
between 15% and 35%, depending on the number
of elevators.

Tip
5

Annual
Price adjustment

Most
contracts include an annual price adjustment
clause that will increase your cost as the cumulative
increases are applied over several years. It
is possible to save hundreds of dollars by limiting
the percentage the cost can increase each year.
You may want to add a "not to exceed 3%
percent per year" clause to keep cumulative
maintenance costs down. In addition, you may
also want the elevator company to notify you
in writing prior to applying any increase.

Tip
6

Hold-harmless
clauses.

The
average lawsuit is over twenty five thousand
dollars. Avoid inheriting a legal responsibility
to defend the acts of others through contractual
hold-harmless clauses. (See liability section)

One
way a manager can control trouble call costs
is by having building personnel investigate
each complaint before the elevator maintenance
contractor is called. Here are just a few examples
of owner responsible calls that can take place:

Carpet
tacks, coins, and other foreign objects caught
or wedged under
car or hall doors

Keys
dropped in the pit.

Stuck
buttons due to moisture

Tip
9

Reduce
overtime repair costs

When
trouble calls occur on weekends you are typically
billed for the time differential or double-time
if a breakdown occurs on a Sunday or a holiday.
When possible call the company's answering service
and ask for repairs to be scheduled first Monday
thing morning at no charge under full maintenance
contracts.

Misuse
or vandalism

The
same protocol applies if misuse or vandalism
that is not covered under most contracts causes
a breakdown. When possible avoid double-time
charges for the overtime callbacks on Sunday
by scheduling repairs on Monday morning at normal
labor rates.

Major
Repairs

If
the elevator mechanic finds that a repair is
major, it will be held for regular hours. You
will be billed for the time differential for
a double-time hour if a breakdown occurs on
a Sunday or a holiday.

Tip
10

Emergency
Elevator Phone Repairs & Monitoring

Once
you have reached an agreement with an elevator
maintenance company it is critical that the
building owner have all emergency telephone
equipment connect to a 24-hour
monitoring center that meets all the necessary
code requirements for your State.
Look for a company who provides a warranty for
your elevator phones with their monitoring contracts.
This can save you over $700.00 a phone if they
need to be replaced. We recommend MyLinkLine
Communications who can provide all the monitoring
and warranty services you will need for your
elevator phone equipment. To learn more about
this company visit: www.mylinkline.com.

ElevatorSource
would like to extend a special thanks to Elevator
Consultant Robert Lowell for allowing us to
reprint this article.